If you invested $40,000 and received back $100,000 seven years later, what annual interest rate would...

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If you invested $40,000 and received back $100,000 seven years later, what annual interest rate would you have obtained? 2. You invest in a REIT stock on Jan 1 for a price of $20 that pays $2 in dividends throughout the year and is worth $21 on Dec 31. What are your (a) income and (b) growth returns for the year? 3. You invest in a REIT stock on Jan 1, 2017 for a price of $20 that pays $2 in dividends throughout 2017 and is worth $21 on Dec 31, 2017. The also stock pays $2 in dividends throughout 2018 and is worth $22 on Dec 31, 2018. What is (a) the two year return if the dividends are not reinvested and (b) the two year return if dividends paid in year 1 are reinvested in the stock at the start of year 2. 4. You buy a property on January 1, 2015 for $150,000. On December 31, 2015, you receive Net Operating Income (NOI) of $6,000 and immediately sell the property for $152,500. a. What is the income return? b. What is the appreciation (growth) return? 5. A borrower has offered to pay you a constant $1,000 per month at the end of each month A forever (i.e. assume you and the borrower live forever). You discount these cash flows at the nominal mortgage equivalent rate of 5%. What is this worth to you? 6. An apartment building can be well represented as producing net rent of $10 per square foot annually in arrears (at the end of the year) forever, with expected annual growth over the long run of negative 1% per year-that is, a decline of 1% per year. What is the price you are willing to pay today per square foot if the required annual expected total return from the investment is 9%? If you invested $40,000 and received back $100,000 seven years later, what annual interest rate would you have obtained? 2. You invest in a REIT stock on Jan 1 for a price of $20 that pays $2 in dividends throughout the year and is worth $21 on Dec 31. What are your (a) income and (b) growth returns for the year? 3. You invest in a REIT stock on Jan 1, 2017 for a price of $20 that pays $2 in dividends throughout 2017 and is worth $21 on Dec 31, 2017. The also stock pays $2 in dividends throughout 2018 and is worth $22 on Dec 31, 2018. What is (a) the two year return if the dividends are not reinvested and (b) the two year return if dividends paid in year 1 are reinvested in the stock at the start of year 2. 4. You buy a property on January 1, 2015 for $150,000. On December 31, 2015, you receive Net Operating Income (NOI) of $6,000 and immediately sell the property for $152,500. a. What is the income return? b. What is the appreciation (growth) return? 5. A borrower has offered to pay you a constant $1,000 per month at the end of each month A forever (i.e. assume you and the borrower live forever). You discount these cash flows at the nominal mortgage equivalent rate of 5%. What is this worth to you? 6. An apartment building can be well represented as producing net rent of $10 per square foot annually in arrears (at the end of the year) forever, with expected annual growth over the long run of negative 1% per year-that is, a decline of 1% per year. What is the price you are willing to pay today per square foot if the required annual expected total return from the investment is 9%?

Answer rating: 100% (QA)

SOLUTION 1 To calculate the annual interest rate obtained from investing 40000 and receiving 100000 seven years later we can use the formula for compound interest FV PV x 1 rn Where FV is the future v... View the full answer